DCCA to Review Danish Crown-Tican Merger Proposal
The European Commission in Brussels has partially referred the proposed merger between Danish Crown and Tican to the Danish Competition and Consumer Authority (DCCA) at its request. Both companies are Danish and are active in the operation of slaughterhouses, meat processing and the marketing of value-added meat products including ready meals.
After a preliminary investigation, the European Commission found that the proposed transaction would threaten to significantly affect competition in certain markets in Denmark. Those aspects will now be examined by the DCCA under national law.
At the same time, the Commission has approved under the EU Merger Regulation the proposed transaction in the other affected member states (Poland, Sweden and the UK), concluding that the deal would not significantly impede effective competition in the European Economic Area (EEA) outside Denmark, given the low market shares of the parties in these markets.
Randers-headquartered Danish Crown and Thisted-based Tican are both vertically integrated food companies with activities at every level within the value chain for pork, including pig breeding, slaughtering, meat processing and in supplying pig meat. Their activities span several European countries including Denmark, Poland, Sweden and the United Kingdom.
On June 3, 2015, Danish Crown and Tican notified the European Commission of the proposed merger. On June 22 the DCCA requested that the Commission refer to it the assessment of the proposed transaction. The DCCA put forward various competition concerns in certain Danish markets related to pig meat. The DCCA further explained that it would be well placed to review the competition effects in Denmark of the proposed transaction given, for instance, its proximity to and specialist knowledge of the markets and experience in handling previous cases related to the same markets.
The evidence gathered by the Commission confirmed that the merger threatens to affect significantly competition in Denmark, where Danish Crown and Tican are currently the two largest competitors. The Commission therefore decided to partially refer the merger to the Danish Competition Authority, which will deal with the case under national law.
The Commission's investigation of the merger's impact outside Denmark did not highlight any competition concerns. Therefore, the Commission cleared the transaction outside Denmark under the normal merger review procedure.
Companies and Products
Danish Crown is the ultimate parent company of the Danish Crown Group, an international food company with activities around the world. Danish Crown itself is a cooperative owned by its members, who supply raw materials (pigs, sows and cattle) to the cooperative.
Tican is the second largest (and only other) co-operative pig slaughterhouse in Denmark. It is vertically integrated through its subsidiaries in the slaughtering of pigs (Denmark) and meat processing (Denmark, Poland and the UK). The company’s sales activities are global in scope.